Weekly Update

May 5, 2018

 

Welcome to the Bollinger Bands Letter Weekly Update for Saturday May 5th, 2018.

 

Next week is a newsletter week, the May Bollinger Bands Letter will be posted on Saturday the 12th.

 

In this technological age one can work from anywhere. I have a couple of conferences I wish to attend in Europe later in May that are awkwardly spaced, so I plan to work from Europe between the conferences. I will be out of the office for three weeks. If you need anything, you can reach us by email bbands@bollingerbands.com, or leave a phone message, 310-798-8855.

 

Smaller stocks maintained a bit of an advantage this week. I can't really say why I feel this way, but I feel that we are entering a time for mid-sized and smaller stocks. It is some combination of technical and fundamental factors plus some gut feeling. I also feel that growth will maintain an edge, but that size will be more important than style.

 

The FAANG stocks seem to have run out of steam. They have been at current levels for two months now. While they aren't going down, the mania for them seems to have faded a bit. I think that it is time to focus elsewhere. There is no need to sell these unless they start to behave badly, just investigating potentially greener pastures elsewhere. Stock picking in mid-cap and smaller stocks is where I think the rewards will be.

 

The gold stocks have resisted the recent pullback in bullion, a very interesting positive divergence of the sort we haven't seen for a long while. The Oil Service stocks are lagging the gains in crude, as is natural gas. I just can't get bullish on the sector.

 

A surge in the dollar has carried it back to last year’s levels. I'd use this strength to buy some international stocks.

 

There is one change to the ETF portfolios this week, sell EWO and buy EWS, which is a switch from Austria to Singapore.

 

The Value Line Plan remained in the market this week, with the Value Line Geometric at 551.97 the Friday sell stop is 543.28.

 

The ETF Program portfolio holdings:

Style (21): IUSG, 6, IWF, 7, IWO, 3.

Country (21): EWS, 2, EWI, 1, EWM, 6.

Sector (27): XLK, 5, IAU, 13, XLY, 4.

 

Details on our Allocations, Ice Breaker positions and ETF portfolios along with our Market Timing Chart Package can be found here:

https://www.bollingerbands.com/bb-letter/

 

Until next time, I wish you well.

 

John Bollinger, CFA, CMT

 

Copyright 2018 by Bollinger Capital Management, Inc.

 

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